Bear market! Recession has it begun.

[Luv2play]

I haven’t done an analysis of the market but  after today’s performance I suppose we are now in a bear market on most indices or close to it. Where it goes next week is anyone’s guess. 
How it affects people will vary. I know a charitable organization I volunteer for has a large endowment handled by a professional financial boutique type service and they started paring down US securities after the election in November. Went largely into cash except for Canadian securities in our 5 banks which are bulletproof and bonds. Looks like a good move. 

 

Edited April 4 by Luv2play

[56harrisond]

JP Morgan predicts 2025 recession as Trump tariffs rattle market

The Hill by Ashleigh Fields - 04/04/25 8:03 PM ET

J.P. Morgan is forecasting that the U.S. economy will enter a recession this year as fallout from President Trump’s tariffs has taken hold.

In a Friday evening note to investors, the company’s chief U.S. economist Michael Feroli said the firm predicts that gross domestic product (GDP) will likely contract “under the weight of the tariffs.”

Feroli added that the recession is also forecasted to “push the unemployment rate up to 5.3 [percent].”

https://thehill.com/business/5233486-jp-morgan-trump-tariffs-recession/

[jawjateck]

20 hours ago, Kcdave said:

You and Warren Buffett with his $350 billion worth of cash. When we hit the low point he probably already has started his buying spree.

he is smarter than all of us because he started pairing back his positions last October, for instance, and APPLE, knowing he was stacking his cash for this day. His economist probably knew since Trump did not hide his view on what he was going to do that it was going to be an unsettled market.

I still hold my prediction that we will hit down 35,000. Before we get equilibrium and start to move upwards. A lot of Talking Heads have said the same thing thinking that we could still end up by 12/31/2025 equal to where we ended last year.

 

My portfolio is vastly under-weighted in equities. Sold alot at the end of 2024, and again in January and February, parked the proceeds in online savings, money markets and bonds, The market rolled over at the end of February, and I could sense pain ahead. Also, a few stocks were insanely rocketing on no news. Like META, I didn't (and don't) own it, but the weeks long winning streak in that stock was completely irrational. So, I knew a deep correction was coming. I haven't put any cash to work on any of the down days, until yesterday. I bought small positions in big names right before the close. If Monday and Tuesday are bad days, I'll buy a little more.

[jawjateck]

23 hours ago, FrankR said:

Now we all want to know…whats on your shopping list?? 🤓

It will show up on my 13F when I file with the SEC by Aug 14. 😂

[mike carey]

8 minutes ago, jawjateck said:

It will show up on my 13F when I file with the SEC by Aug 14. 😂

Our market has had similar palpitations, and the opening bell on Monday (8pm Sunday USEDT) will be interesting given Friday's US market results. We're not in correction territory yet but will likely be on Monday. I'm heavy on income earning shares that have been resilient so far, and I'm riding this out (perhaps to my detriment).

[jawjateck]

3 minutes ago, mike carey said:

Our market has had similar palpitations, and the opening bell on Monday (8pm Sunday USEDT) will be interesting given Friday's US market results. We're not in correction territory yet but will likely be on Monday. I'm heavy on income earning shares that have been resilient so far, and I'm riding this out (perhaps to my detriment).

Utilities and telecoms did well on Thursday, as safe havens, but they were hit yesterday, as people realize this may go on for awhile, and they are selling winners to raise their cash piles.

[+ FrankR]

1 hour ago, jawjateck said:

It will show up on my 13F when I file with the SEC by Aug 14. 😂

I am more concerned with filing my taxes this year! I also sold significant parts (like 70%) of my equity holdings in 2024 and it resulted in capital gains…so uncle Sam, my silent partner, wants his cut.  Moved into SGOV mostly. Luckily i have pushed Roth options to the max everywhere, the past 20 years, so those sales are not taxed. Not brave enough to buy just yet - i do think there is more pain to come. Another 5% drop and I will start buying. Non-US blue chips are looking interesting with a strong dollar in play and dividend yield support. 

[EZEtoGRU]

It’s comical how there is complete silence from our posters who wailed for four years that a recession was coming (it never happened). Now that the stock market is in free-fall mode, unemployment is rising, consumer confidence is collapsing, and we are almost surely entering a recession…it’s crickets from the peanut gallery. Anyone surprised about that?

Separately,  what are poster’s views on if the administration might get spooked with the reaction to recent actions and possibly reverse course on the tariffs?  

[EZEtoGRU]

 

Everyone knows one can make money during a market collapse if you have disposable cash. Duh!  The thread topic is more about whether a recession is starting, how deep will it be, and for how long will it go on for.   

[Kevin Slater]

Moderator's warning: steer well clear of politics (and trolling) in the finance forum.  While it's difficult and maybe even counterproductive to discuss investing and economics without plumbing political matters, error on the side of less expression and less politics.  There are certainly other forums out there without such restrictions available elsewhere. Thanks.

 

[+ JEC]

Glad we moved 30% to cash at the peak.   Wish I had gone for 50% (which was my instinct, my financial advisor advised 30%).

[TonyDown]

Was it another thread I was whining how Jamie Diamond was forever warning a recession is coming and joked he'll eventually be correct?  

I listened to economist Paul McCulley yesterday referring to our situation as a stagflation purgatory (purgatory morphing into hell TBD) that the tariffs are noxious enough to cause recession.  We can only wait and see how bad.

He explained there is nothing preemptive to do now.  Chairman Powell might reduce interest rates later when the information comes in on rising prices vs economic slow down from tariffs.  Assuming we have recession, prices may fall much later as demand falls.  But initially, we should assume the US will see significant stagflation.  

A friend was laid off recently when the restaurant he worked at closed.  That place has been there long time, so it's very sad.  For him, the recession has begun.  One might say the same for any Fed worker that was recently cut.  How bad a US recession might be won't be known, as McCulley said, until the information comes.

He also recommended where to invest in the next few years, however IMO his advice is biased since his wealth likely came from PIMCO.  I doubt he would bet against them.

Edited April 5 by TonyDown

[EZEtoGRU]

Delta Airlines will report Q1 results and it's full-year outlook tomorrow Wednesday April 9th.  It will be the first US airline announcing Q1 results.  It should give important insight into whether future demand for domestic and international travel is starting to soften in light of falling US consumer confidence and concerns raised by foreigners relative to potential travel to the US.  My expectation is that the Q1 results will be pretty decent but that the full year outlook will be quite bearish.  I expect that future international travel bookings could be quite soft...particularly for foreigners booking flights to the US.  Let's see.

[Luv2play]

I expect the big news tomorrow will be the 104 percent tariffs on Chinese goods imported into the US which go into effect 1 minute after midnight. That will probably overshadow all other announcements and send the markets into a further tailspin. If the Chinese hold firm the pressure is going to increase on Trump to relent. 

[BeamerBikes]

On 4/5/2025 at 2:56 PM, JEC said:

Glad we moved 30% to cash at the peak.   Wish I had gone for 50% (which was my instinct, my financial advisor advised 30%).

This is unlike any other environment in my opinion. There are massive active inputs being put in place by Washington in unheard of time frames. As result, I don’t think the old advice other than “Cash is King” and “No debt is best” applies until things settle out.  
 

My other concern would be making sure to take advantage of any gift cards or loyalty points.  If the company associated with them goes bust or falls on very hard time, the gift card value evaporates with them or points gets devalued. 

[+ Vegas_Millennial]

On 4/4/2025 at 8:26 AM, EZEtoGRU said:

Also, the US unemployment rate rose slightly in March to 4.2% from 4.1%. A minor increase to be sure, but let’s see how the trend line moves in the coming months. I predict a hockey stick graph as the deep recession takes root. 

I will be among the unemployed in less than 4 years.  (I'm retiring!)

[GTMike]

To answer the OP's question anectodally the CEO of the largest Institutional Money Management firm in country, (Blackrock, managing over $11 Trillion, yes "Trillion" dollars) commented publicly yesterday that he and other CEO's kinda already assume a recession has begun. 

Basid definition of a recession is defined (at a bare minimum), as typically two consecutive quarters of real (inflation-adjusted), negative GDP growth. So the interpretation is that forecasting Q2 GDP growth is slowing and expecting Q3 to do the same on current trajectory.

BlackRock Chief Larry Fink Says CEOs See the Economy in Recession Already

APPLE.NEWS

---

His remarks join a chorus of warnings and dim views on the economy from financial leaders and economists.

 

[+ Vegas_Millennial]

On 4/5/2025 at 5:49 AM, FrankR said:

I am more concerned with filing my taxes this year! I also sold significant parts (like 70%) of my equity holdings in 2024 and it resulted in capital gains…so uncle Sam, my silent partner, wants his cut.  Moved into SGOV mostly. Luckily i have pushed Roth options to the max everywhere, the past 20 years, so those sales are not taxed. Not brave enough to buy just yet - i do think there is more pain to come. Another 5% drop and I will start buying. Non-US blue chips are looking interesting with a strong dollar in play and dividend yield support. 

It's a good thing you sold this year, while the 2017 Tax Cuts are still in effect.  Unless Congress acts, tax rates go up next year to pre-2017 levels.

[+ Vegas_Millennial]

On 4/5/2025 at 9:03 AM, EZEtoGRU said:

 

Everyone knows one can make money during a market collapse if you have disposable cash. Duh!  The thread topic is more about whether a recession is starting, how deep will it be, and for how long will it go on for.   

I keep my investments split 80/10/10 to stocks, bonds, and Real Estate Investment Trusts (REITs).  The 80% stocks is 1/3 each in US Large, US Mid/Small, and Foreign Developed/Emerging stocks.  I check my allocation monthly.  Whenever one allocation is up 20% relative to its assigned share of my portfolio (example: my 10% bonds is now 12%), I sell that surplus and buy extra of whatever is most below my set asset allocation. 

By checking monthly and rebalancing whenever something is 20% higher than my target allocation, I've successfully sold stocks at the 2008 high, bought stocks at the 2009 low, sold stocks in February 2020, and bought stocks at the March 2020 low.  And...I sleep well every night.  I haven't had to rebalance in a few years...  it doesn't matter if bull/bear markets last months or years, because I rebalance at set ratios not a set time frame.

Edited April 9 by Vegas_Millennial

[mike carey]

8 hours ago, Vegas_Millennial said:

I will be among the unemployed in less than 4 years.  (I'm retiring!)

Remember, to the extent that the unemployment rate affects the markets, and could influence whether or not it's a bear market or a recession has begun, unemployment is a measure of the number of people who are looking for work but who can't find it. If one person retires that reduces the number of people in the 'employed' category but not the 'unemployed' category until someone is hired to replace them. (The rate of participation in the employment market, is a separate consideration, although less significant than unemployment.)

[+ glutes]

I used to have a 401K, now I have a 201K.

Can I convert it to Rubles?

[Luv2play]

On 4/3/2025 at 5:55 PM, Luv2play said:

I agree the Fed may have to reduce rates but it is the bond market, and particularly for US treasuries, that will dictate whether the US government will pay less on its debt. 
 

I think there is a scenario when demand for US treasuries will decline, particularly from foreign buyers like the Chinese and Japanese. With higher tariffs on their exports their revenue will decline and they will have fewer dollars to invest in US bonds. 
 

The result will be less demand for US bonds and higher rates on bond yields and lower prices (the two go hand in hand). This would mean the government issued bonds would be costlier and drive up the cost of debt. 

I posited this scenario last Thursday but didn’t think it would come to pass so quickly. Now the US bond market is suffering the jitters and bond rates are going up. 
 

This, more than the stock market, will put pressure on the government since their borrowing costs on their 31 trillion dollar debt will go up. 

[EZEtoGRU]

The US blinked on reciprocal tariffs by delaying them for 90 days except for China. DOW is back over 40,000. 
 

Anyone else smell market manipulation here?

Edited April 9 by EZEtoGRU

[Luv2play]

1 hour ago, EZEtoGRU said:

The US blinked on reciprocal tariffs by delaying them for 90 days except for China. DOW is back over 40,000. 
 

Anyone else smell market manipulation here?

No. It’s just unplanned chaos. Politics redacted. 

[BuffaloKyle]

How can we be in a recession when the dow is up almost 3,000 points!!!! 

Basically as long as you are not close to retirement just leave your money where it is and ride this out. Imagine if you're someone who just took all your money out yesterday and this happened today.